Latest News

LATEST NEWS: The Cook Islands Passes Legislation to Address EU Concerns

The Cook Islands passed a suite of legislations on 17 December 2019 to comply with the European Union’s international tax good governance standards, thus avoiding being listed as a non-cooperative tax jurisdiction. Agreed in December 2017, the EU list is a common tool for member states to tackle risks of tax abuse and unfair tax competition.

Background

In 2017, the Cook Islands had made a commitment to the EU’s Code of Conduct Group (COCG) to amend its legislation by 31 December 2018. However, due to inconclusive results from the general election held in June 2018, Parliament was not able to sit. It was therefore granted an extension until 31 December 2019. 

The legislation passed sees:

  • The removal of Cook Islands tax exemptions for companies incorporated or registered under the International Companies Act 1981-82, subjecting those companies to the domestic company tax regime and a tax on company profit of 20%. International companies existing on or before 17 December 2019 will not be subject to the new law until 2022. International companies incorporated after 17 December 2019 will be subject to the taxation provisions with immediate effect. This includes international companies carrying on international banking business from within the Cook Islands under the Banking Act 2011 and international companies licensed to carry on captive insurance business under the Captive Insurance Act 2013.

  • The abolition of Category C insurance licences issued under the Insurance Act 2008. 

  • The removal of specific tax concessions on investment in the Cook Islands offered under the Development Investment Act 1995-96 and a tax exemption on revenue from certain public works offered under the Income Tax Act 1997. 

The Deputy Prime Minister and Minister of Finance of the Cook Islands, the Hon. Mark Brown, has also announced that in 2020 the Cook Islands will be undertaking a thorough review of its taxation system, including the taxation of company income, and will explore the introduction of a territorial tax system. 

If you have any questions, please do not hesitate to contact your Asiaciti Trust representative.